American Shipbuilding Association

CONTACT:
Cynthia L. Brown
202-544-8170

(Washington, D.C.) – According to the recently released 2006 Department of Defense (DOD) report: Military Power of the People’s Republic of China, China’s naval fleet is growing rapidly. The DOD report cites Chinese surface combatants at approximately 70 ships, 55 attack submarines and 50 amphibious lift ships. These numbers reveal an increase of over 14 percent from last year. The report cites China’s growing naval fleet as an attempt to become a blue water naval power. The United States Navy sits at 282 ships with 99 surface combatants, 57 attack submarines, and 38 amphibious lift ships.

To protect Chinese interests around the globe, China must be able to project power and a strong Navy is the only way to achieve this goal. China, since 1990 has concentrated on increasing its defense spending. In 2006, China announced it would increase its military budget by 14.7 percent to $35 billion, the Defense Intelligence Agency places this number closer to $70 - $106 billion. This is just the latest increase in a trend that started in 1986. From 1986 to 1994, China increased defense spending 159 percent. While the overall United States defense budget has increased 51 percent since 2001, naval spending for ship procurement has been cut by 17 percent over that same time period.

Currently, China’s Navy is 3rd only to the United States and Russia but with the possibility of a Chinese aircraft carrier by 2015 and the rapid build rate in Chinese shipyards, America’s lead will not last long. The United States DOD has classified the low ship production rates and a shrinking U.S. Navy fleet as an “acceptable risk.” The Chinese see this “acceptable risk” as an opportunity to establish a Navy that will overtake ours in the coming decade.

The United States Navy and DOD have acknowledged the Chinese growth in blue water Navy but have done little to resolve the discrepancy. Although, the Department of the Navy has committed to re-building the United States Naval fleet to a force level of 313 ships, 55 of these will be the new coastal Littoral Combat Ship (LCS). The Navy has stated that $14.1 billion a year is needed for shipbuilding to reach the 313-ship fleet. This figure is substantially more than the $8.9 billion budgeted in Fiscal Year 2007.

The American Shipbuilding Association is the national trade association of the shipbuilding industry. ASA members include the nation’s largest shipyards and more than 70 companies engaged in the manufacture of ship systems and components.